Trump's Tariffs Rattle Wall Street, Forecasting Economic Pain
In This Article:
* EAF +3.45%
* MSFT +0.02%
* CLF -2.38%
* NVDA -3.67%
* AA -0.59%
The introduction of 25% tariffs on Canada and Mexico and 10% tariffs on China by the Trump administration has caused a stir on Wall Street. Economists and strategists foresee potential consequences for the US economy, including:
Morgan Stanley Public Policy Research Team
* Recession in Mexico as a base case
* US inflation increase of 0.3% to 0.6%
* US growth decrease of 0.7% to 1.1%
EvercoreISI Economics Team
* Decline in US growth due to reduced exports, investment, and employment
* Estimated increase in US inflation of 40 basis points and decrease in growth of 40 basis points
EvercoreISI China Strategist Neo Wang
* Tariffs announced during Chinese New Year holiday, regarded as an offense by Chinese officials and citizens
* Concerns about tariffs undermining negotiations on TikTok and Beijing's economic growth
JP Morgan Metals & Mining Analyst Bill Peterson
* Risk to financial performance of Alcoa (AA), GrafTech International (EAF), and Cleveland Cliffs (CLF)
* Interruption of trade flows and shift to cheaper imports could impact earnings for AA and EAF
22V Research Strategist Michael Hirson
* Symbolic tariff increases by China on US imports expected
* Possibility of informal Chinese retaliation, such as reduced commodity purchases from US
* Beijing could address US concerns on fentanyl exports to Mexico as part of a potential deal
Despite the volatility, some analysts predict a deal between the US and China is possible, although political hurdles remain high.
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